National Minimum Wage and National Living Wage

The National Minimum Wage was introduced in April 1999 to set the minimum hourly rate that an employer can pay an employee. From April 2016, the National Living Wage was introduced as a higher rate for workers aged 21 and over. Both rates are reviewed and increased each year, with the latest increases taking effect from 1 April 2026.

What's the Difference Between the National Minimum Wage and the National Living Wage?

The National Living Wage is the legal minimum employers must pay anyone aged 21 and over. There is no London weighting, despite the higher cost of living in the capital. 

Workers under 21 are entitled to the National Minimum Wage, which is paid at lower rates reflecting age and experience bands.

Rates from 1 April 2026

The rates for the National Living Wage and National Minimum Wage from 1 April 2026 are as follows: 

The daily accommodation offset will also increase to £11.10 per day from 1 April 2026. 

Apprentice Rates

The apprentice rate of £8.00 per hour applies to apprentices aged under 19, or those aged 19 and over who are in the first year of their apprenticeship. Once an apprentice is aged 19 or over and has completed their first year, they are entitled to the minimum wage rate for their age group.

What's Changing and Why?

The government's long-term intention is to move towards a single genuine living wage for all ages, phasing out the age bands gradually over time. 

Following high increases in April 2024 and April 2025, the minimum wage rate for employees aged 21 and over has increased 22% since 2024. The most significant increase in 2026 takes effect for those aged 18 to 20, who benefit from an 8.5% rise. 

The Real Living Wage and London Living Wage

It is important to distinguish between the government's National Living Wage and the Real Living Wage. The Real Living Wage is independently calculated each year by the Living Wage Foundation to reflect the real cost of essentials like rent, food, travel and energy. It is voluntary, not a legal requirement.

From May 2026, the Real Living Wage rates will rise to £14.80 per hour in London and £13.45 per hour for the rest of the UK.

Accredited employers have six months from the October 2025 announcement to implement the new rates, with a deadline of 1 May 2026.

What Happens if You Don't Pay the Minimum Wage?

Paying below the statutory minimum is a serious legal matter.

Employers who do not pay at least the appropriate minimum wage face penalties as well as being named and shamed by HMRC. 

What Employers Should Do Now

• Review all pay rates and update payroll systems to reflect the new rates from 1 April 2026
• Check that workers moving into a new age band are updated promptly
• Verify that apprentices are paid the correct rate based on their age and year of apprenticeship
• Consider the impact on overall pay scales and budgets
• If you employ staff through agencies or outsourced arrangements, ensure those arrangements also comply with the new rates

Contact us

Contact the payroll team by completing the form on our website. Alternatively you can call us on 020 8977 3559 at our Hampton Wick office to speak to an adviser, or use the Livechat below.

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